Milestones: 1921–1936

NOTE TO READERS “Milestones in the History of U.S. Foreign Relations” has been
retired and is no longer maintained. For more information, please see the full notice.

The Neutrality Acts, 1930s

Introduction

In the 1930s, the United States Government enacted a series of laws designed to
prevent the United States from being embroiled in a foreign war by clearly
stating the terms of U.S. neutrality. Although many Americans had rallied to
join President Woodrow Wilson’s crusade to make the world
“safe for democracy” in 1917, by the 1930s critics argued that U.S. involvement
in the First World War had been driven by bankers and munitions traders with
business interests in Europe. These findings fueled a growing “isolationist”
movement that argued the United States should steer clear of future wars and
remain neutral by avoiding financial deals with countries at war.

President Woodrow Wilson

First Neutrality Act

By the mid-1930s, events in Europe and Asia indicated that a new world war might
soon erupt and the U.S. Congress took action to enforce U.S. neutrality. On
August 31, 1935, Congress passed the first Neutrality Act prohibiting the export
of “arms, ammunition, and implements of war” from the United States to foreign
nations at war and requiring arms manufacturers in the United States to apply
for an export license. American citizens traveling in war zones were also
advised that they did so at their own risk. President Franklin D.
Roosevelt originally opposed the legislation, but relented in the
face of strong Congressional and public opinion. On February 29, 1936, Congress
renewed the Act until May of 1937 and prohibited Americans from extending any
loans to belligerent nations.

President Franklin D. Roosevelt

Neutrality Act of 1937

The outbreak of the Spanish Civil War in 1936 and the rising tide of fascism in
Europe increased support for extending and expanding the Neutrality Act of 1937.
Under this law, U.S.citizens were forbidden from traveling on belligerent ships,
and American merchant ships were prevented from transporting arms to
belligerents even if those arms were produced outside of the United States. The
Act gave the President the authority to bar all belligerent ships from U.S.
waters, and to extend the export embargo to any additional “articles or
materials.” Finally, civil wars would also fall under the terms of the Act.

Photograph from the Spanish Civil War

The Neutrality Act of 1937 did contain one important concession to Roosevelt:
belligerent nations were allowed, at the discretion of the President, to acquire
any items except arms from the United States, so long as they immediately paid
for such items and carried them on non-American ships—the so-called
“cash-and-carry” provision. Since vital raw materials such as oil were not
considered “implements of war,” the “cash-and-carry” clause would be quite
valuable to whatever nation could make use of it. Roosevelt had engineered its
inclusion as a deliberate way to assist Great Britain and France in any war
against the Axis Powers, since he realized that they were the only countries
that had both the hard currency and ships to make use of “cash-and-carry.”
Unlike the rest of the Act, which was permanent, this provision was set to
expire after two years.

Neutrality Act of 1939

Following Germany’s occupation of Czechoslovakia in March of 1939, Roosevelt
suffered a humiliating defeat when Congress rebuffed his attempt to renew
“cash-and-carry” and expand it to include arms sales. President Roosevelt
persisted and as war spread in Europe, his chances of expanding “cash-and-carry”
increased. After a fierce debate in Congress, in November of 1939, a final
Neutrality Act passed. This Act lifted the arms embargo and put all trade with
belligerent nations under the terms of “cash-and-carry.” The ban on loans
remained in effect, and American ships were barred from transporting goods to
belligerent ports.

In October of 1941, after the United States had committed itself to aiding the
Allies through Lend-Lease,
Roosevelt gradually sought to repeal certain portions of the Act. On October 17,
1941, the House of Representatives revoked section VI, which forbade the arming
of U.S. merchant ships, by a wide margin. Following a series of deadly U-boat
attacks against U.S. Navy and merchant ships, the Senate passed another bill in
November that also repealed legislation banning American ships from entering
belligerent ports or “combat zones.”

Overall, the Neutrality Acts represented a compromise whereby the United States
Government accommodated the isolationist sentiment of the American public, but
still retained some ability to interact with the world. In the end, the terms of
the Neutrality Acts became irrelevant once the United States joined the Allies
in the fight against Nazi Germany and Japan in December 1941.